Comings and Goings: New group calls on government support for reeling hospitality industry

TORONTO, ON- MARCH 24 - Restaurants can still offer take out and delivery only as only essential industries are open as the province shut down non-essential services and industries to help slow the spread of COVID-19 in Toronto. March 24, 2020. Steve Russell/Toronto Star

A new group representing independent restaurants and their suppliers has sprung up to call for enhanced financial support from various levels of government, including a “significant cash stimulus package” to help hospitality business owners reeling from the COVID-19-induced economic slowdown.

SaveHospitality.ca has created a website and Instagram account to push for “immediate and concrete support from all levels of government” during the ongoing economic downturn.

Erik Joyal told iPolitics that the group is largely being led by himself, his business partner John Sinopoli; Andrew Oliver, who heads up Oliver & Bonacini Hospitality; and Dyson Forbes of Food and Restaurant Industry Navigator.

Collectively, SaveHospitality.ca counts as members some 1,000 restaurants in Canada and represents 40,000 hospitality workers and suppliers, according to Joyal, who said the group is growing fast and is receiving hundreds of emails each day.

“Independent restaurants are going to need a lot of financial support during this time. Although loans are nice on the surface … we don’t want to be piling on more debt,” he said in a phone interview, noting that many restaurants have significant debt obligations and rely on day-to-day cash flow to finance them.

So far, Joyal said the group has had discussions with officials from federal Finance Minister Bill Morneau’s office and Ontario Finance Minister Rod Phillips’ team, as well as various MPs and the Toronto mayor’s office.

According to their publicly posted plan, the business owners want governments to act before the end of the month to provide “immediate Employment Insurance benefits” for all laid off staff, supplement those EI benefits “to reflect the higher cost of living in our urban centres” and to cease the collection of commercial property taxes for restaurants, bars, retail and hospitality-related businesses and their suppliers.

Among the other asks they want to see enacted before the end of March:

A government directive for rent and additional rent amounts to be paused temporarily from April 1st, until a government aid package can be finalized and implemented.

Require insurance companies to cover business interruption during this time of mandated hospitality business closures. (The group says insurers are currently denying coverage for such claims.)

Require the abatement of all hospitality-related business loan payments from financial institutions.

Suspend all taxes owed to the federal and provincial governments including HST, EHT, source deduction obligations and corporate taxes, as well as remove any penalties and/or interest for current late payments.

Waive WSIB payments for February and March, 2020 (due March 31st and April 30th, 2020, respectively), without penalty and interest for 90 days.

Require credit card companies to lower all interest charges on cards held by hospitality and hospitality-related businesses, including merchant services providers (e.g. fees and equipment leases/rentals).

Prime Minister Justin Trudeau on Monday said all businesses that see at least a 30 per cent drop in revenue because of the COVID-19 pandemic will be eligible for the federal emergency wage subsidy.

That 75 per cent subsidy intended to prevent layoffs and keep struggling businesses afloat will thus be open to companies small and big, as well as for non-profit organizations and charities. Trudeau said the enhanced wage subsidy will apply on 75 per cent of the first $58,700 of annual salary of workers, which equals to up to $847 a week. The program will offer support for up to three months, backdated to March 15.

Canada’s biggest banks have also taken steps to permit mortgage deferrals.

Once the group’s immediate actionable steps are complete, it wants a new cash stimulus program that is “distributed in the form of a forgivable loan provided by the banks but funded and guaranteed by the federal government.”

The loans would be based on a formula of 10 per cent of prior year annual sales and the amount would be increased if the shutdown lasts longer than eight weeks by adding roughly 1.25 per cent of annual sales for every additional month of forced closure.

“Because if we get the money… then everything else sort of falls into place. Landlords will get paid, suppliers will get paid. Other restaurant contractors like cleaning companies and lending companies …will get paid. And then the restaurants themselves will have to pay their employees for, you know, pre op-labour and things of that nature,” Joyal said of the rationale for the group’s asks.

“There’ll be money to buy inventory, inventory and to have some working capital in the bank, because there’s going to be a lengthy process for us to get back up to [our previous] sales level.”